Question

Capital budgeting projects can be classified according to the purpose of the project. List and explain...

Capital budgeting projects can be classified according to the purpose of the project. List and explain the three categories for classifying projects according to their purpose.
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Capital budgeting decision can be classified according to the purpose of those projects-

A. Expansion projects are the capital budgeting projects which will be undertaken for expansion purpose and these products are mainly undertaken in order to expand the existing business of the company

B. Replacement projects are all such projects which are to be undertaken by the company in order to increase the efficiency of the current system by replacing the current resources and making it better by increasing the efficiency through replacement

C. new project or new services and other form of capital budgeting project which will be undertaken after company will want to enter another project or anotheranother segment and they will be introducing new project so these capital budgeting project are undertaken in order to enter into new project by the company.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. Define the net investment for a capital budgeting project. What is included in a capital...
1. Define the net investment for a capital budgeting project. What is included in a capital budgeting project’s net investment? 2. Capital budgeting projects can be classified according to the purpose of the project. List and explain the three categories for classifying projects according to their purpose. 3. The impact of indirect effects of a capital budgeting project should be included in cash flow estimation. Give some examples of indirect effects, and explain why they are important and should be...
Cash flow development for capital budgeting projects requires the inclusion of all cash inflows and cash...
Cash flow development for capital budgeting projects requires the inclusion of all cash inflows and cash outflows associated with a new project. Depreciation, while recognized as a non-cash expense, is included in the cash flow development. a.) Why is depreciation included in developing cash flows for a capital budgeting project? b.) Which category (or categories) of cash flow development would depreciation be included? (List each category where depreciation is part of the cash flow development and explain why depreciation is...
The G. Wolfe Corporation is examining two? capital-budgeting projects with? 5-year lives. The? first, project? A,...
The G. Wolfe Corporation is examining two? capital-budgeting projects with? 5-year lives. The? first, project? A, is a replacement? project; the? second, project? B, is a project unrelated to current operations. The G. Wolfe Corporation uses the? risk-adjusted discount rate method and groups projects according to? purpose, and then it uses a required rate of return or discount rate that has been preassigned to that purpose or risk class. The expected cash flows for these projects are given in the...
7)      A company uses the payback method to evaluate capital budgeting projects.  It is currently considering projects A,...
7)      A company uses the payback method to evaluate capital budgeting projects.  It is currently considering projects A, B and C. Project A             Project B              Project C Initial cost (cash outflow)                         $10,000               $10,000               $10,000 Cash inflows: 1st year                                             $  1,000                 $9,000                  $  5,000 2nd year   $9,000                 $1,000                   $5,000 3rd year $15,000       - 0 -                    $35,000 a)      Find the payback period for each of the above capital budgeting projects.  Label the payback period for each project so I can see which payback period goes with which project. b)      What two major weaknesses of the payback method are illustrated by...
Using everything you know about capital budgeting, if the two projects are mutually exclusive, which project...
Using everything you know about capital budgeting, if the two projects are mutually exclusive, which project or projects should the firm undertake? Explain in full. The answer must be complete. Substantiate with numbers.
When evaluating mutually exclusive capital budgeting projects, the NPV and IRR could conflict with each other...
When evaluating mutually exclusive capital budgeting projects, the NPV and IRR could conflict with each other in the ranking of projects. List and explain three reasons why a conflict could exist. Which technique is best to use in a conflict? Explain.
CAPITAL BUDGETING CRITERIA: MUTUALLY EXCLUSIVE PROJECTS Project S costs $17,000, and its expected cash flows would...
CAPITAL BUDGETING CRITERIA: MUTUALLY EXCLUSIVE PROJECTS Project S costs $17,000, and its expected cash flows would be $5,000 per year for 5 years. Mutually exclusive Project L costs $30,000, and its expected cash flows would be $8,750 per year for 5 years. If both projects have a WACC of 12%, which project would you recommend? Explain. Which project would you recommend? Explain.
​(​Risk-adjusted discount rates and risk classes​) The G. Wolfe Corporation is examining two​ capital-budgeting projects with​...
​(​Risk-adjusted discount rates and risk classes​) The G. Wolfe Corporation is examining two​ capital-budgeting projects with​ 5-year lives. The​ first, project​ A, is a replacement​ project; the​ second, project​ B, is a project unrelated to current operations. The G. Wolfe Corporation uses the​ risk-adjusted discount rate method and groups projects according to​ purpose, and then it uses a required rate of return or discount rate that has been preassigned to that purpose or risk class. The expected cash flows for...
Capital budgeting criteria: mutually exclusive projects. Project S costs $17,000 and its expected cash flow would...
Capital budgeting criteria: mutually exclusive projects. Project S costs $17,000 and its expected cash flow would be $5,000 per year 5 years. Mutually exclusive Project L costs $30,000 and its expected cash flow would be $8,750 per year for 5 years. If both projects have a WACC of 12%, which project would you recommend? Explain. **Show Work**
11-11 CAPITAL BUDGETING CRITERIA: MUTUALLY EXCLUSIVE PROJECTS $225 $225 $50 $49 Project S costs $15,000, and...
11-11 CAPITAL BUDGETING CRITERIA: MUTUALLY EXCLUSIVE PROJECTS $225 $225 $50 $49 Project S costs $15,000, and its expected cash flows would be $4,500 per year for 5 years. Mutually exclusive Project L costs $37,500, and its expected cash flows would be $11,100 per year for 5 years. If both projects have a WACC of 14%, which project would you recommend? Explain
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT